Analysis
If the cost of the meals did not qualify for a § 162(a)(2) business expense deduction, then they would be classified as a § 262 personal expense, and would be non-deductible. Whether the cost of the meals falls under § 162(a)(2) depends on how the phrase "traveling ... away from home" is interpreted. The Commissioner has interpreted the phrase as requiring the taxpayer to sleep or rest during his trip. The Court found two advantages to the Commissioner’s interpretation. First, the Court noted that a business traveler who is allowed a § 162(a)(2) business deduction receives a windfall, because part of what is spent on meals represents a personal living expense that other taxpayers are not entitled to deduct at all. Therefore, fairness demands that § 162(a)(2) should not extend to all situations involving business travel. Allowing a taxpayer who has to travel two blocks from his home on a business trip to take a § 162(a)(2) deduction, but not the taxpayer whose business requires no travel at all, illustrates the inequitable result of a contrary approach. Second, the requirement that the taxpayer must sleep away from home in order to qualify for a § 162(a)(2) deduction is a bright-line, easy to administer rule that avoids unnecessary litigation.
The Court uses statutory interpretation to affirm the Commissioner’s approach. First, the Court notes that “traveling” implies being “away from home.” Therefore, a broad interpretation of “away from home” would make the phrase redundant. In addition, the Court observes that the statute groups “meals and lodging” together, suggesting Congress’ intent to allow a deduction for the cost of meals only where the business traveler has to pay for lodging as well.
Finally, the Court notes that even if alternatives to this bright-line rule are available, it is not the Court’s role to fashion a new rule. “In this area of limitless factual variations, ‘it is the province of Congress and the Commissioner, not the courts, to make the appropriate adjustments.’”
Justices Douglas, Black and Fortas dissented on the ground that the phrase “while away from home” goes to geography and not time. The dissent argued that the majority’s approach of interpreting the phrase as “overnight” incorrectly switches the focus to a time element.
Read more about this topic: United States V. Correll
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